Thursday, January 13, 2005

The Reformation of the Corporation.

Today, couple of articles caught my attention:
  1. IBM investigates the appliance of services science
  2. Cisco's Secret Software Strategy
What is interesting in these two articles? That all businesses the world over have to reinvent to deal with the new realities - high-tech manufacturing from China, software outsourcing from India, etc. And, two of the major companies that help transform the business the world over - namely Cisco and IBM, not to speak of Microsoft, Oracle, etc. - are having to reinvent themselves! While doing so, of course, they have to resort to coopetition or else they will step on each other's toes.

What does this reinvention require? Complete modularization of software components that can be stitched together to provide highly customized business process for any enterprise.

Cisco CEO John Chambers said, in January 2004, "We believe that to compete in this environment we're about to go into, with very good competitors from Asia, etc., that our productivity per employee needs to be $700,000," and seems convinced that increasing the productivity of Cisco's workers is the key to Cisco's competing effectively in the global marketplace.

IBM's own services business reinvention is according to, Paul Horn, IBM's Senior Vice President for Research, "If you can think about your company as a collection of components, then you can re-engineer and optimise them. You don't have to have a four-year ERP job with an uncertain return, you can model the pieces in a simple way will make your returns much higher. It is the start of a revolution in how the whole software and services industry is going to deliver value. It is probably the biggest change in the IT industry, maybe ever. ... It's a big change for us and a critical change in the way IBM thinks about itself. We use technology to provide value to customers so that they don't have to outsource their business to the lowest labour cost in the world, because they're generating huge amounts of value."

The upshot of this posting? I wonder how many U.S. companies are thinking this radically?

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